The deputy director of the China Automotive Technology and Research Center (CATARC), at the 4th International Clean Vehicle Technology Conference and Exhibition in Beijing yesterday, welcomed increased taxes for large-engine cars as a way to help reduce emissions.

"Consumption tax reform cannot have an immediate impact on the clean-vehicle market, but at least it is an inspiration for car makers," said Zhang Jinhua.

"Substantial support from the government is needed,” he said. “Without it, the price for hybrid vehicles will remain high and the market can never grow."

The current tax structure, which has three categories for different engine sizes, is likely to change to have five, said Zhang.

For instance, cars with engine displacement of 1 liter or less will pay 1 percent instead of the current 3 percent while vehicles with 4 liter or more engines would pay between 20 and 25 percent instead of the current 8 percent.

Earlier this month, Feng Fei, director of the State Council Development Research Center’s industry department, proposed that taxes be levied on buyers rather than auto producers as is done now to "encourage them to consider buying economy vehicles with lower emissions."

Prius, jointly manufactured by Japan-based Toyota and the China FAW Group Corporation, will be the first hybrid car available on the Chinese market.

Zhu Yanfeng, president of the joint venture, announced on Wednesday that Prius would be available from mid-December for 250,000 yuan (US$31,000), a price tag substantially higher than the average.

The conference and exhibition, held annually in the capital, opened on Wednesday and is set to close tomorrow. Its organizers said it aims to provide a stimulating atmosphere for cooperation, collaboration and trade by bringing together enterprises and leaders from a wide array of professional backgrounds and areas of expertise.

(China Daily November 25, 2005)